This episode of the RecruitingDaily Podcast is, for lack of better words, pretty darn great. Today’s guest is Ian Cook, VP of People Analytics at Visier. We’ll discuss SEC and its new requirements for more data on diversity, equity and inclusion.
Ian walks us through what that means and why it’s happening. As it turns out, not knowing anything about people in a business is putting investment decisions at risk, so this was a smart move.
Among other exceptional things, Ian is an expert in driving organizational growth with an extensive and varied background in consulting, sales, operations and executive leadership. He is recognized as a proficient people leader, and he’s a lot of fun to talk to.
Visier, the current market leader in the people analytics industry, is a pre-built analytics solution created expressly to help employers ask the right questions and quickly identify opportunities and risks within an organization. That means immediate, informed decisions.
Tune in and let us know your thoughts!
Listening Time: 28 minutes
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Ladies and gentlemen, this is William Tincup and you’re listening to RecruitingDaily Podcast. Today we have Ian on from Visier. And we’re going to talk about something that I think is fantastic. And I can’t wait, I’ve been looking forward to this. It’s basically the SEC is requiring more data on diversity, inclusion. And Ian’s going to take us into what that is, why that is, where it came from, and all that type stuff. So Ian, would you do us a favor, or the audience a favor and introduce yourself and Visier?
Yeah, for sure. And, it’s a pleasure to be on with you William, and a topic that is near and dear to my heart. So my background, I’m the HR person who got fascinated by analytics 20-plus years ago and has spent the last 20 years of my career looking at how we help elevate the practice of HR through the use of data. And, doing it in a people-centric way, that’s not about inspection and interrogation. It’s actually, how do we really use data to help people be their best selves? So, that’s kind of the drive for me. And then, Visier is the technology firm that I work in, where we build that capability for our clients.
They use our technology to apply data to key challenges, like is our recruiting working? Who do we need to hold onto in the Great Resignation? Those kinds of questions. And we deliver that as a service, as a cloud application. So, a growing and ever more prevalent and more important area. And, that’s where the SEC stuff is really, it’s on our radar, it’s something that’s really crucial and looking forward to exploring with you.
So, how did the SEC get into this to begin with? If we go a basic history lesson.
Basic history lesson.
Good place to start.
So the SEC was kind of, let’s just say they were cajoled into it by people like CalSTRS and BlackRock. If you go way back in history, this has been brewing for two or three years, where the investment organization, so CalSTRS, they manage the retirement pool for thousands, and thousands, and thousands of people in California. They’re making decisions that impact somebody’s retirement in the future. They want the best possible information about an organization they want to invest in. And, they recognize and have recognized for years that not knowing anything about people in a business is putting those investment decisions at risk. BlackRock, and again, another big investment house, share exactly the same perspective, as like we can make all these bets on the finance stuff, but really if you think about technology company, it’s the people that write the code. Sure, finance is a lagging indicator, but I really want to know about the people. So, that group had been advocating for more people disclosure for a long time. And kudos to them, they got it over the line in late last year.
And I’m assuming that, first of all, I’m glad… Let’s just get to the point, I’m very, very happy that the SEC is actually caring about this, so yes. And, I’m sure along with the investment community that kind of prodded them, they probably also went out to industry professionals, and also kind of looked at HR and TA and looked at like what’s important, etc. So, let’s just talk to the average global head of TA or HR, what do they need to know about what the SEC cares about?
Yeah. And that’s a perfect question, William. So, the way the SEC kind of came up with a balance was that you need to disclose information that’s material to your business. And so, they left it wide open. Because when they worked with the industry bodies, there was a general sense of world unique, we can’t have a standard set of measures. So the actual ruling says, “What does your management board look at?” And so, if you put yourself in the seat of somebody who runs talent acquisition, now what does your board care about? It should really care about that diversity of your pipeline. Are we sourcing diverse candidates? Are they working with a way through our funnel in an unbiased fashion? Is that leading to the kind of diverse organization we need to be?
Because we know now, from things like the Edelman Trust Barometer that consumers are making purchasing decisions based on the diversity of the company. So it’s no longer, “Oh, this is an interesting thing for us.” Like, we’ve seen the material impact on business for a lack of diversity. We’ve seen the reputational risks that happen because of it. So I think it’s, well, they… So, the simple answer is that they need to know how people make a difference to their business, and specifically how recruiting in your space either helps or hinders that kind of mission for the business.
SEC, I’ve read a bunch of their regs before. How did they define diversity and inclusion? Do they have a finite definition or what does it look like right now?
They’re in the U.S., they’re going to be following the EEOC definition. So, the standard ethnicity categorizations, focus on women, focus on… The EEOC is focused on women, ethnicity, increasingly age. There is a movement to broaden that out to several other categories, including things like neurodiversity.
But again, they’re not… There’s a lack of… Again, maybe the next wave of this is there’s a lack of standardization there, which is never helpful. And, I think people should look to the EEOC as the foundation there.
Yeah. Well, I mean, first of all, that gets ratified and gets refined over time. It’s going to be fluid the more we learn about D&I, the more we’re going to learn that we don’t know. And so, we’re going to constantly be adding things to it, which is great. And so, we look at what the EEOC is doing, then the SEC will follow that. And so, we’ll have even more refinement. And again, it’s never going to be… I think if people are looking for this, its just a fixed thing, I think they’re probably looking at it incorrectly.
But, you know you’re dead right. And, I think that’s the really next interesting wave of this story is, we’ve seen the first draft of reports that have come through the SEC. And you’re right, like diversity and equity and inclusion was the top reported, kind of top explored area. What was interesting is a lot of it were very open statements of, we plan to have this very diverse workforce, it was only somewhere around the 30, 40% of organizations who put data behind that. And so, the best organizations are going to start leading and setting the bar for everybody else to follow, because making a statement about diversity is completely different to actually being transparent about your data. And so, when leading organizations put that data out there, others will have to follow. And so, I think the practice of the leading organizations will set the bar for others, and it will be a game of catch-up. Which is interesting to see how it actually, just having that mandate in place really drives rapid improvement and sort of practice,
Rough guess. I know you’re a metrics person, but a rough guess of those that interact with the SEC. How many CHROs do you think know that this is even going on?
Oh, what a great question. So, we pulled our clients and their leading organizations. So, it was in the 40, 50% of our clients that had clocked this, because it landed on their plate to actually deal with. But then from there, I would sort of say, “Well, maybe it’s 10, 20% of CHROs that know this is going on.”
It’s creeping up on people. And again, I think that’s why podcasts like yours and getting this story out is vital.
I think what’s interesting is that for those that are listening to this, and all of a sudden they’re terrified on some level, it’s already things that you’re doing. And, a lot of it is framing up things that you would normally do as kind of a next step, is like an annual report around D&I. And so, what are you doing? What are the metrics? What are the outcomes? Where have you made some successes and failures? And all that stuff. Kind of like a regular financial annual report for a publicly-traded company.
A lot of the better firms that are doing great work in D&I have their own kind of, it’s a form of an annual report, but it creates transparency.
And I think that if you mentally, if you just move over to that, it’s like, “Okay, it’s not going to be an annual report and the financial annual report that we all kind of fought our way through, our K-1s, anything like that.” [inaudible 00:09:41].
This is more of a telling the story of what you’re doing, showing outcomes, showing progress, and also reporting back what you’re learning and numbers.
Exactly. And, I think that’s great advice, as well I mean, there’s a number of organizations that have already dug into this space through what’s called ESG, environmental social governments reporting. And if you jump onto a website, the organization like train, you’ll see exactly as you say, it’s like an annual report on what are our diversity goals? Where are we in terms of our numbers? I mean, what are our next steps? And it’s about, it’s formulated in very much as a financial statement would be, some strategy monitoring, next steps. And so, there’s great examples there for people to follow. It’s not, you don’t have to make it up on the spot. You can actually see what the leaders are doing and go, “Okay, here’s a template.”
Well, without giving away client names and things like that. So, you’re more familiar with obviously the folks that you deal with day-in and day-out basis. And again, no client names. The folks that are doing it really well, like okay, so there’s going to be a large majority of publicly traded companies that are going to be blindsided. Okay, fair enough. Happens.
Sox blindsided most companies. Then this will blindside CHROs as well. Fair enough. But when you look at your clients, and you think of how they looked at this and how they just got in front of it, like owned it. And we’re not going to be blindsided, we’re actually going to get in front of it and innovate on it.
Yeah. So, the foundation was that they had a people analytics like they had an analytics group that was already operating, that was already had the data, that could already dig in and find… Do we have… What is our situation with women in management? Like, they were already in a place to answer that question and they’re already been looking at it. Then they have a CHRO on board, who’s familiar with the data, articulate in translating that to the rest of the business. And then, they’re building relationships with the investor reporting group to say, “Hey, we’ve got all this data, we’ve got all this domain expertise, it’s part of what you’ve now got to put forward, let’s get together and work at how we tell a story.”
Because lots of people do look at this as a sort of classic HR reporting things like, “Oh, no, I’ve got to get the data.” “Oh actually, the data’s kind of 20%.” What really makes a difference is getting the data, and then working out the story that you can tell from it and how that’s going to help your business. And, that’s like 60% of the work.
Well, it’s fascinating because CHROs are forging new relationships with like a group that we naturally probably wouldn’t talk to, but maybe once a year as investor relations, the IRR team, right?
This is a team that resides in a lot of different places, but this is a team that maybe as a CHRO, once a quarter, twice a year, once a year, you might interact with them. But again, starting with data and then comms, making sure that you understand kind of what you’re going to communicate and how you’re communicating, and then building this story arcs, storylines, and then working with and really collaborating with investor relations.
Yeah, exactly. Because, as I expect in the near future, whilst the CFO has been and is often a permanent fixture on that earnings call.
The CHRO starts to become a fixture on the earnings call and-
Maybe not every single one, but at least once or twice a year.
A hundred percent. I mean, again, if the SEC is putting this much emphasis behind it, you’re going to start being judged. And again, it’s going to be important. It’s already, societally important. Like, we already know that this is important. And the good news here is the budgets are being put towards D&I,
… which before, there was a lot of talk, maybe some action. Now, you can see just by the number of people that are being hired as D&I leaders, etc. Like there’s actual, real good things that are happening. Now, you’re dealing with the other part of this is okay, you have good things that are happening, now you have to tell that story. And again, it’s not all going to be just like financial. It’s not always perfect.
But it’s the having the ability. I mean, I have been on our earnings calls before, where you didn’t hit the earnings and you still told a good enough story that you didn’t get punished.
Exactly. And, I think you touch on an important point about why this is so materially different because this is now a disclosure rule, an investor is in a situation to sue the company for lack of disclosure, incorrect disclosure, all of those various things. So, this isn’t actually just another wave of information to share, this is now a situation where if you’re not on your game, there are potential repercussions to your share price and various other things. So, you don’t disclose anything about your diversity step’s situation, investor makes an investment, something bubbles up through the business, then it’s the share price, that investor is now legally able to say, “Lack of disclosure, I’m going to see you for my loss.”
So, this just more reporting for reporting sake, it may take a while, we’ll see. We’ll watch with bated breath.
But It has that kind of edge to it, which means you have to get started.
Well, this has the ability to actually really change things, because you’re changing them not just from the grassroots to bottom up, but this is actually where money is exchanged.
To Main Street and Wall Street. Okay. So now, we’re talking about Wall Street, you know what? When they say that something’s important, again, that could be month on month growth or whatever they decide is important, when they say something’s important and then you say you have to disclose it, not just the legal side, but now again, you’ve got to be able to put plans in place. Now, everyone has to own it. So it is a CHRO, global head of talent. It is kind of still fall in the people, human talent area.
But it’s also going to fall in operations, finance, marketing, sales, the C-suite, everybody, everyone’s going to have a hand in this because everyone’s going to be responsible.
Oh, for sure. No, people is not just HR’s [inaudible 00:16:35], for sure.
Which is good. I mean, I think that’s a positive move for HR, is that it’s not just on their shoulders. We needed to make these moves, we’ve got budget, we know what we need to do, now we need to start thinking about how do we do it. And oh, by the way, everyone cares. Okay. Like, everyone cares about revenue.
There isn’t a single person at the firm that doesn’t care about revenue, software engineer over there cares about revenue. Everyone cares about revenue.
I tell you, William, you’re dead right. Like, I work with a bunch of software engineers and they’re like, “Ian, how’s my feature going to help us make money?” Is often the question they’re asking and rightly so.
And Sam Walton did this masterfully from a retail perspective, is he would disclose gross margin on all products.
So cashiers, or just store clerks or people are gathered carts knew the gross margin on products.
And, what was great about that is he’s pushed down that responsibility of understanding here’s what things cost and here’s what things… Here’s where we make money.
That’s a really great point, William, because you’re highlighting something else that we’re seeing, is often people data has kind of been hoarded as like, “Oh, people data, we can’t let it out.” But in reality, you have to share it, the right stuff the right way clearly, because then you engage everybody in what does it mean, and how do we make it better and how do we go forward. I mean, DEI has driven a lot of that. But, I think that example of Sam Walton is really what happens when you liberate data, is you actually get progress. So, I love the example.
Well, it’s also something that it’s just like with revenue, it’s never perfect. And this is the thing I think that you have in D&I, well, diversity, equity, inclusion, belonging. You have this thing that, that there’s a sense of from a practitioner perspective that they got to get it right. And, the problem with that line of thinking is it creates a paralysis on just trying stuff. Like, okay, we want to do more with the LGBTQ+ community. Okay, let’s try something.
I mean, let’s do an event. It might go horribly wrong, okay, but we we’ve got to try stuff. And, I think that’s one of the things just like with revenue is you try things, you experiment, you open up different markets, you try stuff, some of it works, some of it doesn’t work, that’s fine.
It is fine. And I think kind of making a statement and giving people permission to try that is crucial. We’ve studied how does the use of data going to spread out across an organization successfully, and you’re dead right like it spreads out successfully when you find a pocket of people, you try something, it generates an answer. They get excited, they tell their friends, like it is this sort of viral wildfire, do something and move on kind of approach. As opposed to the classic HR, well, this is performance management, we got to get it right for everybody. We can only deploy when we’re ready. We got to deploy it to everybody at once, and we get to deploy it once and then move on. So, it’s a very different habit of kind of execution for HR.
So as you say with this SEC piece, we don’t have to get… It’s not going to be, do X and it’s finished and it’s all correct.
It’s going to be, “Well, we’re going to start with D&I and we’re going to talk about that for a bit.” “And, we’re going to make sure we get kind of tidy and right, and then we’re going to move on to potentially succession, and then we’re going to move on to other areas of talent, acquisition, applicant, diversity,” etc. So-
Yeah, you have to sort of learn and grow as you move.
Well. And, there’s so many different stories to then play with and to disclose what you’re doing on the front end of the funnel. What you’re doing, like you said, with succession or internal mobility, what you’re what you’re doing you to educate employees, CIGs, ERGs, all kinds of different things. Like, there’s so many different storylines that you can explore. And now that you have to disclose, I think it’s a wonderful opportunity for companies to then take, and then start telling stories about here’s what we’re learning. Like, it’s a journey, it’s not a destiny. Just like revenue, it’s not fixed. It’s a journey and we’re learning that this is where we are snapshot in time. It’s on the earnings call, snapshot in time and we’re learning this. This is what we’ve learned so far in the last quarter, here’s what we’re learning right now.
And, can’t wait. Here’s what we think that we’ll learn by the time we get on the next call in 90 days from now. We got to rewire HR to think like that, to be able to talk like that.
Again, I love the way you’re phrasing this as an opportunity because a lot of the work that we supported and kind of heard through our clients was the CEO looking to make public statements about not just where they are, but where they’re going to be. And then, wanting to have confidence that the trajectory that they were committing to was realistic-
… that the rate at which people came in, and moved and how all of that diversity changed. Like, organizations are complicated and you can fix aspects of diversity through hiring, but you have to fix other aspects of it through retention, you fix other aspects through promotion. So, [crosstalk 00:22:27] you’re assembling those three things, and then engaging the CEO in that conversation saying, “Yes, if you make a statement to say we’re going to be X percent women in management and above by three years out, we’ve got the data that’s got your back.” I mean, what an opportunity to build a relationship with the CEO? It’s fantastic.
A 100%. And this is again, the CEO just like with revenue, they’re going to make sure that the forecasts are reachable. That the forecast, when they talk to their revenue officers and financial officers, they’re going to make sure that… They’re not going to underpromise and sandbag, because you also get punished when you do that. But, they’re going to make sure that it’s realistic enough, stretch enough that they can hit it. And, because they’re making promises to the market, man, there’s people that all they do is keep track of what you said.
So, this isn’t one of those [inaudible 00:23:28]. This is so different than like how historically we’ve looked at diversity and inclusion where we’re like, We’ll make a statement like, “Yeah, in three years, it’s going to be this.” And, you know what? You’re not really going to be held accountable to that. I mean, maybe you get there, maybe you don’t, but one’s really hold you accountable. Wall Street, oh no, they…
You know what? I think you make a great point because often the EEOC component was seen to sort of raw compliance. Like, we got to give them the data, we got to give it in a certain structure, it’s a really a checkbox activity that just keeps our nose clean. Whereas this is different. This has-
This is completely different. This is promises, this is forecasting. And again, storytelling, which I think you nailed early. It’s having the ability of telling people kind of that past, present, and future. And then the future has to, when the CEO says again, as it relates to any form of diversity, inclusion, they’ve got to have rock-solid confidence in that, because they’ve got to sell it.
Well. And that’s a question actually, that I’m sort of pursuing a little bit as this evolves, William is like, how many HR groups are the ones that are making sure the story is being told, versus how many investor relations groups are literally, instantly delving into people analytics and deciding how the story is going to be told? Like, there’s an opportunity and a challenge, make the point that the CEO is not going to present these numbers without the backing. So, which part of the organization is going to be-
I think for me, and you’re going to know this because you’re going to talk to more people about it, but I think it’s a great collaboration between two groups of people that have a lot in common.
But, if the IR does it without HR, good luck.
[crosstalk 00:25:24] Exactly.
If HR does it without IR, good luck.
Yeah, it means nothing.
And any competent CEO that started in a publicly-traded company, they’re going to get those two bodies of groups together.
And say, “You two folks that don’t normally work together, fantastic, now you’re working together because I’ve got to… Just like they do with revenue, sales and marketing, and finance, they’ve got to be able to tell a story.” And because A, there’ll be held to their word and B, it’s money, its real money. This is not play, so.
Yeah. No, for sure. But that collaboration is based on HR being on top of its data. And you’re like me, you’ve probably seen some of the stats there that there’s a gap to close.
A 100%. Well, and I think that another call that we’ll have on a different day is just talking about data, in so far as structuring data and making sure your data is clean, making sure you can trust your data, like all of that stuff, which is important. But right now, just educating people to understand that the SEC is now requiring disclosure.
And, it’s not a nice to have, it’s not a suggested calmly. This is, yeah, you got to do it. Or you know what? You do it, or you don’t do it, and there’s penalties.
Yes, no, exactly. And I think that’s well put, Because it was a bit surprising how little was disclosed in the first round, but we’ll [crosstalk 00:27:00].
I love it. First of all, I think it’s one of the greatest opportunities for HR in the last 20 years. It’s just now you have an opportunity. You’ve been given this opportunity by the SEC, which you wouldn’t normally put these things together, but you’ve been given this opportunity to then do what you already want to do.
Most HR leaders, in your courtroom somewhere, they already want to do all this stuff.
I think that’s well put. And so, here’s your way to get the funding and make [crosstalk 00:27:28].
And here’s the way, exactly. Oh, you’ve had trouble getting funding before. Yeah, that’s not going to be as much of a struggle going forward.
Turns out. Yeah. Ian, thank you so much for your time and breaking this down. This is such an important topic. I really appreciate you.
Oh, you’re you’re totally welcome, William. Thanks for having us on.
Absolutely. And, thanks for everyone listening to RecruitingDaily Podcast, until next time.